Adapted from “Uncover Hidden Value with a Post-settlement Settlement,” first published in the Negotiation newsletter.
You’ve reached an agreement that you find satisfactory and your counterpart does as well-but you can’t shake the sense that you could have done even better. For example, you might be happy with the price you achieved in a purchasing contract but wonder if you could have factored better delivery terms into the equation.
After reaching a verbal agreement or inking a contract, negotiators may be able to generate even more value by engaging in a post-settlement settlement (PSS) process, according to Harvard Business School and Harvard Kennedy School professor emeritus Howard Raiffa. During a PSS process, parties try to negotiate better terms on certain issues while remaining free to return to the existing agreement if either one of them is ultimately dissatisfied with the new arrangement.
Here’s how it works. If you’re not 100% satisfied with the result of a recent negotiation, suggest to your counterpart that the two of you spend a little more time discussing potential improvements that might increase the value of the deal to everyone involved. Be sure to clarify that the discussion is informal and will not alter the existing deal unless you both believe it’s superior to the one you just signed.
Secure in the knowledge that you have a successful fallback, you and your counterpart may be able to invent novel terms that you hadn’t imagined during your initial deal making. One reason a PSS process can be so successful is that it capitalizes on the trust and goodwill you generated during your negotiation.
But beware that your counterpart may view your suggestion of a PSS process as your attempt to capture last-minute concessions. Be sure to stress that your PSS will replace the current deal only if it’s fully supported and desired by both parties.